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Hospitals and airports: The new retail frontiers

Record sales: Airport retailing now poses a threat to CBD and super regional shopping centres. Photo: PETER BRAIGThe decision by Goodman and Accor to develop a $100 million site at Mascot, near Sydney airport and include a new Pullman hotel, indicates the importance now being placed on new areas for retail.

The unlocking of value at an array of non-traditional retail spaces, such as cafes in previously under-utilised office foyers, started the ball rolling years ago and has been a boom for tenants and landlords.

While shopping centres remain the primary focus for the department stores and high-end fashion brands, new concepts are being designed to catch the consumer dollar, such as hospitals and general airport precincts.

Duty-free shopping is long established at airports, but only for those flying. But as more offices and hotels are built near the airports, there is a growing demand for shops on the public concourses.

Accor’s chief operating officer, Simon McGrath, said including the planned new Pullman near Sydney’s domestic airport terminals, the group has seven hotels near airports, under different brands, three of which are in Sydney.

Mr McGrath said development and upgrades of airports around the country is happening at a fast pace and that will also bring in new retailing concepts mixed in with hotels.

Across the country, there is a new Brisbane Airport proposal, the Southern Precinct Project at Melbourne Airport, the Adelaide Airport redevelopment, the Perth airport expansion, the establishment of a ‘corporate city’ at Canberra Airport and a New Townsville Airport.

“Airport hotels are no longer necessarily about travel, they are the engines of whole new integrated multi-use developments that have evolved to offer a complete mix of business, retail, industry and tourism activities. They have become mini-cities in their own right with their own demand drivers,” Mr McGrath said.”

According to retail experts at Michael Bate and Nora Farren at Colliers International, the supply of retail space has also become a focus in hospitals, universities and airports, with many of these locations reviewing their current retail offering. This allows them to generate and drive income and also provide a better service to patients, students and commuters.

They said while many hospitals and universities previously offered only vending machines and cafeteria style dining, we are now seeing an expansion of the volume and variety of retail being offered. This includes upmarket coffee shops, a range of products, cafes, supermarkets and services that are now considered essential as well as Asian eateries, and generally healthier dining options.

“Establishments currently reassessing their retail offering include; the University of Western Sydney, Liverpool Hospital, Fairfield Hospital, Wollongong Hospital, Nepean Hospital and Prince of Wales Hospital,” Ms Farren said.

Mr Bate said the new locations, including at airports, was supported strongly by consumers.

He said, as a result of the increasing demand, airport retailing now poses a threat to CBD and super regional shopping centres. There is strong demand from both quality domestic and international retailers to locate in airport terminals.

“With offshore travel strong and domestic markets improving, numbers of people moving through airports is at record levels. Retailers are taking advantage of this and opening flagship stores at terminals,” Mr Bate said.

This has not been lost on the major landlords, with Frank Lowy’s Westfield spending a lot of money establishing a presence at Los Angeles airport, with plans to expand to other terminals in the coming years.

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